The future of Customer Success depicts that the function will grow and take on a more automated, digital and one-to-many approach. It's no secret that AI has come to absorb the more mundane tasks and propel the ability for customer success teams to spend more time developing and retaining meaningful customer relationships.
Ed Powers, principal consultant, Service Excellence Partners
2023 will be a big year gaining market traction in new customer intelligence platforms. They collect text and transcripts from multiple channels (Email, Slack, Zoom, etc.), apply natural language processing (NLP), artificial intelligence and machine learning (AI/ML) to mine signals hiding in plain sight. We humans reveal subconscious, emotional markers in the spoken, written, and even body language we use. Customer sentiment, intention, and level of trust can be surfaced and incorporated into more predictive customer health scores while providing valuable insights and feedback to CSMs and account managers. These technologies are at an early stage of development but maturing quickly, and the sky’s the limit on what it can do.
A Proactive Game
Customer Success teams, as opposed to Account Managers or Customer Support representatives, are proactive in that they try to anticipate and address needs before customers ever reach out. It goes without saying, that once the client sees the need to reach out about an issue, the damage may already be done. Damage measured in terms of company reputation or inability to deliver timeous solutions impact the client's perception of the product, relationship and cost-to-value.
Companies with a great Customer Success focus can guide clients along the customer journey and foresee implementable key solutions, that may positively impact the decision to renew in the face of perceived value.
Over the past few decades, Customer Success has found it's place in organizations and where customer support, customer service & account management (AM) teams offer reactive help to customers who reach out and ask for it, Customer Success focuses on taking a relational and life-cycle approach to anticipate needs, set expectations and guide or pivot clients along their best user journey for their specific outcomes.
With the tremendous growth of SaaS and subscription-based models over the years, renewal hinges on helping customers continually see value and success with the product, since there's almost always another competitor or version of the product that customers could choose.
Data shows that for every one customer who contacts customer support, 26 customers with a problem don't reach out. Those are all customers a business stands to lose if it doesn't fix its problems, as research also shows that 91% of those who don't complain simply churn instead.
By taking a proactive approach in understanding customer needs and informing of and eradicating product issues, Customer Success gives your company a better chance of retaining those 26 customers who do not complain and simply churn.
Prescribing Value
Customer perceived value assumes that each customer evaluates their purchases to determine if they meet their wants or needs, then they compare that evaluation to the price they're paying. Sometimes, pricing can also affect perceived value.
We want what we are sold... and more. But often we need to keep prescribing the value inherent in our products and that is not always just about the product. It's about what our customers need long-term, and how they use the product they've been sold, to realize their goals.
Ensuring there is a clear, measurable and agreed-upon definition of customer value established in your organization is a key tenet of driving efficient and scalable revenue retention and expansion. Without this comprehensive and ubiquitous customer value foundation, you are putting your ability to drive maximum value realization and, as a result, best-in-class Net Dollar Retention, at extreme risk. By clearly defining customer value in your organization and using it as a steel tread to connect your cross-functional teams, you will create a frictionless customer journey that easily takes your customers from acquisition and adoption to retention and expansion.
On the flip side, when you fail to prescribe and communicate value, you may need to re-price downward to fit your lack of perceived value.
Quantifying Value
Understanding that the value of your products or services is determined by your customers and not by your company is the first step in correctly quantifying customer value. Customers will make transactions with you only if or when they perceive the value they will benefit from.
It’s essential to understand what your customers value most and offer that to them. These days, it’s more about the experience and benefits that can include ease of use, higher availability, etc. Once you understand this, it’s easier to start quantifying value (and delivering it, too) because, as the saying goes, “what gets measured gets done.”
Putting the customer at the heart of your business is undoubtedly the best way to do business, so determining which of your existing customers buy from you repeatedly and then learning how often they make a purchase, will deliver answers to often, unanswered questions about profitability, acquisition costs, marketing expenses, production costs, and more.
Consider separating customers into segments based on purchase frequency, volume, and product types. Look into the customer defection rate and then rank your customers’ likelihood to make another purchase from you.
These considerations will provide you with insightful and actionable data about what your customers value so that you can ultimately deliver a greater perception of value to them. This will allow you to create a healthy balance between customer value and value for the customer.
Quantifying customer value is an important part of your value-based pricing strategy. Just as important as communicating your new value-added offerings to customers. So make sure your customers know that you can give them the value they seek.
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